{"id":102575,"date":"2021-06-16T18:28:05","date_gmt":"2021-06-16T12:58:05","guid":{"rendered":"https:\/\/legalwindow.in\/?p=102575"},"modified":"2022-05-26T16:21:42","modified_gmt":"2022-05-26T10:51:42","slug":"covid-impact-mca-allows-board-of-directors-to-approve-boards-report-financial-statements-etc-through-video-conferencing","status":"publish","type":"post","link":"https:\/\/www.legalwindow.in\/blog\/covid-impact-mca-allows-board-of-directors-to-approve-boards-report-financial-statements-etc-through-video-conferencing\/","title":{"rendered":"COVID Impact: MCA allows Board of Directors to approve Board\u2019s Report, Financial Statements etc. through Video Conferencing"},"content":{"rendered":"\r\n<div class=\"wp-block-image\">\r\n<figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"538\" class=\"wp-image-102578\" title=\"COVID Impact: MCA allows Board of Directors to approve Board\u2019s Report, Financial Statements etc. through Video Conferencing\" src=\"https:\/\/legalwindow.in\/wp-content\/uploads\/LW-Facebook-OG-Tag-Image-Design-2-1024x538.png\" alt=\"COVID Impact: MCA allows Board of Directors to approve Board\u2019s Report, Financial Statements etc. through Video Conferencing\" srcset=\"https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/LW-Facebook-OG-Tag-Image-Design-2-1024x538.png 1024w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/LW-Facebook-OG-Tag-Image-Design-2-600x315.png 600w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/LW-Facebook-OG-Tag-Image-Design-2-300x158.png 300w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/LW-Facebook-OG-Tag-Image-Design-2-768x403.png 768w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/LW-Facebook-OG-Tag-Image-Design-2.png 1200w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\r\n<\/div>\r\n\r\n\r\n\r\n<p>Given the situation of \u2018new normal\u2019 ushered in by the pandemic, the functioning of the corporates has drastically changed. The adherence to the laws applicable while still holding its significance has shifted to the virtual modes. The Board meetings and other meetings have taken to the Audio and Video means. These relaxations accorded by the Regulatory Authorities have brought with them the need to acquaint not just with the technology but with the laws so as to ensure their compliance in the true letter and spirit.<\/p>\r\n\r\n\r\n\r\n<p>Therefore, to give further relaxations, MCA has notified a new notification regarding certain matters which can now be addressed through virtual modes. What are they? Let\u2019s try to find out.<\/p>\r\n\r\n\r\n\r\n<table style=\"width: 100%;\">\r\n<tbody>\r\n<tr>\r\n<td style=\"padding: 10px; border: 1px solid #d2d2d2;\"><strong>Table of Content<\/strong>\r\n<ul type=\"1\">\r\n<li><a href=\"#mcanotify\">What did MCA notify?<\/a><\/li>\r\n<li><a href=\"#rule\">What was the rule before the applicability of this notification?<\/a><\/li>\r\n<li><a href=\"#meetings\">Meetings Through Video Conferencing and Other Audio-Visual Means<\/a><\/li>\r\n<li><a href=\"#meaning\">Meaning of Video Conferencing or Other Audio-Visual Means<\/a><\/li>\r\n<li><a href=\"#who\">Who can hold meetings through Video Conferencing (VC) under the Act?<\/a><\/li>\r\n<li><a href=\"#participate\">Who can participate in meetings through video conferencing or other audio-visual means?<\/a><\/li>\r\n<li><a href=\"#takeaway\">Takeaway<\/a><\/li>\r\n<\/ul>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"mcanotify\">What did MCA notify?<\/h2>\r\n\r\n\r\n\r\n<p>The <a href=\"https:\/\/www.mca.gov.in\/content\/mca\/global\/en\/home.html\" target=\"_blank\" rel=\"noreferrer noopener\">Ministry of Corporate Affairs (MCA)<\/a> has scrapped the Rule which prevents the presentation of approval of the annual financial statements, approval of the Board\u2019s report, etc. via video conferencing. Therefore, notifying the Companies (Meetings of Board and its Powers) Amendment Rules, 2021 which seeks to amend the Companies (Meetings of Board and its Powers) Rules, 2014.\u00a0<\/p>\r\n\r\n\r\n\r\n<p>Hence, In the Companies (Meetings of Board and its Powers) Rules, 2014, rule 4 has been omitted.<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"what\">What was the rule before the applicability of this notification?<\/h2>\r\n\r\n\r\n\r\n<p>Earlier, Rule 4 was in respect of matters which cannot be dealt with in a meeting through video conferencing or other audio-visual means which were as follows:<\/p>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li>the approval of the annual financial statements;\u00a0<\/li>\r\n<li>the approval of the Board&#8217;s report;\u00a0<\/li>\r\n<li>the approval of the prospectus;\u00a0<\/li>\r\n<li>the Audit Committee Meetings for consideration of financial statement including consolidated financial statement if any, to be approved by the board under sub-section (1) of section 134 of the Act;<\/li>\r\n<li>and the approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover.<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<p>But if there is a quorum in a meeting through the physical presence of Directors, any other director may participate in the above-restricted matters through video conferencing or other audio-visual means in such meetings.\u00a0<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"meetings\">Meetings Through Video Conferencing and Other Audio Visual Means\u00a0<\/h2>\r\n\r\n\r\n\r\n<p>With the advent of the <a href=\"https:\/\/legalwindow.in\/related-party-transaction-under-section-188-of-companies-act-2013\/?amp=1\">Companies Act, 2013<\/a>, holding Board meetings through video conferencing or other audio visual was permitted under the law. For the first time, the Act facilitated the concept of e-voting. The Act in itself makes no provision facilitating shareholder\u2019s meetings through video conferencing and other audio visual means. Here we discuss the provisions of law and easing measures adopted by the Ministry of Corporate Affairs in this context<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"meaning\">Meaning of Video Conferencing or Other Audio Visual Means<\/h2>\r\n\r\n\r\n\r\n<p>\u201cVideo conferencing or other audio visual means\u201d has been defined to mean that audio- visual electronic communication facility employed which enables all the persons participating in a meeting to communicate concurrently with each other without an intermediary and to participate in the meeting effectively and efficiently.<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"who\">Who can hold meetings through Video Conferencing (VC) under the Act?\u00a0<\/h2>\r\n\r\n\r\n\r\n<p>Every Company can hold a Board Meeting through video conferencing or other audio-visual means, which are capable of recording and recognizing the participation of the directors and of recording and storing the proceedings of such meetings along with date and time. The complete process for conducting of Board Meeting through video conferencing is prescribed under Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014 read with Secretarial Standard &#8211; 1 (SS-1).<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"participate\">Who can participate in meetings through video conferencing or other audio-visual means?<\/h2>\r\n\r\n\r\n\r\n<ul class=\"wp-block-list\">\r\n<li>Chairperson,<\/li>\r\n<li>Directors,\u00a0<\/li>\r\n<li>Company Secretary; and<\/li>\r\n<li>Any other person whose presence is required by the Board<\/li>\r\n<\/ul>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"takeaway\">Takeaway<\/h2>\r\n\r\n\r\n\r\n<p>The post-COVID-19 era has changed the whole scenario wherein most of the works are undertaken online, the Government after deleting Rule 4 will enable the approval of the annual financial statements; the approval of the Board s report; the approval of the prospectus; the Audit Committee Meetings for consideration of accounts; and the approval of the matter relating to amalgamation, merger, demerger, acquisition, and takeover via video conferencing or other audio-visual means<\/p>\r\n","protected":false},"excerpt":{"rendered":"<p>Given the situation of \u2018new normal\u2019 ushered in by the pandemic, the functioning of the corporates has drastically changed. The adherence to the laws applicable while still holding&hellip;<\/p>\n","protected":false},"author":9,"featured_media":102579,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[32],"tags":[],"class_list":["post-102575","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>COVID Impact: MCA allows Board of Directors to approve Board\u2019s Report<\/title>\n<meta name=\"description\" content=\"COVID Impact: MCA allows Board of Directors to approve Board\u2019s Report, Financial Statements etc. through Video Conferencing, etc.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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